Posted on 09/20/2005 2:51:16 PM PDT by schaketo
Philadelphia Newspapers Inc., publisher of The Inquirer and Daily News, said today it plans to eliminate 16 percent of newsroom jobs through buyouts or layoffs, blaming falling advertising revenues and circulation.
The job cuts, similar to actions taken by other major newspapers in recent years, will reduce the number of Inquirer reporters and other newsroom employees by about 75, to 425, roughly its level in the early 1980s, according to union officials at the Newspaper Guild.
The Daily News aims to cut about 25 positions, reducing its newsroom to 105 people, less than half the size at its peak in the early 1980s, according to former Daily News editor Zachary Stalberg.
The cuts amount to 15 percent of The Inquirer's newsroom staff, and 19 percent of The Daily News newsroom staff.
PNI publisher Joe Natoli said the company will lay off employees if there are not enough people taking buyouts voluntarily. Asked whether he thought enough people would leave to make layoffs unnecessary, Natoli said: "Probably not."
Natoli characterized the cuts as a painful last resort essential to meeting profit expectations, adding the company was doing everything it could to reverse a slide in revenues. "At the end of the day, you cannot cut your way to prosperity," he told a room full of Inquirer staffers.
Inquirer editor Amanda Bennett told the group: "As long as I believe we are doing great journalism, I'm going to stay and fight like hell." But she added, "We are going to have to rethink ourselves."
Staffers in both newsrooms - two floors from each other at PNI's Philadelphia headquarters - reacted with both rage and resignation. Several expressed interest in the buyout, calling it inevitable that the quality of the papers would be hurt, regardless of the success of Bennett's restructuring effort.
"How can you not go for it?" said Bob Warner, 56, a 26-year staff writer at the Daily News. "They're taking the institution I work for and destroying it."
Henry Holcomb, president of the Newspaper Guild, blamed PNI's owner, Knight Ridder Inc., based in San Jose, Calif., for demanding profits that all but guarantee problems.
"The Knight Ridder board of directors owes the Philadelphia region and the employees of its newspapers here a profound apology," Holcomb said in a statement.
"Once again our members and the customers of our newspapers are being asked to pay a price for the miscalculations of executives in San Jose who take home millions of dollars each year. As always, our members will work hard to serve our region and customers and give them newspapers people in other cities will envy," Holcomb said.
Knight Ridder, a national chain of about 30 newspapers, announced last month that it would miss profit targets for the year. PNI, suffering from lower ad sales, was among its worst-performing units.
The announcement had no discernable effect on Knight Ridder's stock, which was down 29 cents to $59.89 at 3 p.m. The stock's one-year high was $71.07.
Ben Silverman, an equity analyst and publisher of the Princeton, N.J., based newsletter FindProfit, said that while job cuts can improve bottom line performance briefly, newsroom cuts often prove damaging in the long-run without revenue increases.
"Cutting newsroom staff, on paper, looks like a good idea, but it diminishes the quality of the product," Silverman said. "The more newsroom staff you cut, the worse the product gets and you lose customers."
Stalberg, who resigned as Daily News editor last year, said the job cuts reflect the bitter reality of the news business today.
"The task now in Philadelphia and elsewhere is for papers to redefine themselves and make themselves relvant," Stalberg said, now director of the city's nonprofit political campaign watchdog group, the Committee of Seventy.
"I don't know what that means - but the old formula required a great deal of staff. So there needs to be, in my opinion, a new philosophy of what we care about and here's what we can do well."
Natoli said PNI was in a corner. Total revenue totaled a little more than $500 million last year, significantly less than budgeted. Advertising sales constitute about 80 percent of the revenue and are down between 3 percent and 4 percent so far this year from last year. On an annual basis, that would indicate a reduction of at least $12 million.
The job cuts were expected to generate between $7 million and $8 million in savings, based on per-employee average annual costs of $70,000 to $80,000, he said.
PNI's profit margin is in the "low double digits," Natoli said. Based on $500 million in revenue, that would indicate an operating profit of at least $50 million a year. He did not break down the figures by newspaper.
Average circulation at The Inquirer is down about 3 percent from the same period a year ago, to about 744,000 on Sundays and 365,000 daily, Natoli said.
Teary-eyed, Bennett told newsroom staffers that she believed the worst of the cuts were over when she took the helm of the newspaper two years ago.
"I want to apologize to all of you that we have to be here," Bennett said. In an interview, she said that she has agonized over the move, losing sleep and even vomiting at times with distress.
"We are facing, I believe, a revolution in our industry. We are going to have to fight our way through the fear and anxiety," she told the staff meeting.
At the Daily News, editor Michael Days said he believed he could reach the target of 25 job cuts without layoffs. Asked his criteria for granting a buyout, Days said: "If they want it. My goal is to avoid layoffs."
The buyout package is only being offered to newsroom personnel at both papers, not to ad sales representatives, circulation managers or production workers, Natoli said, adding that those departments already had been cut dramatically.
The buyout package was offered to all unionized newsroom employees, regardless of years at the papers. They would be offered two weeks' worth of pay for every year of service, capped at one year's worth of pay. The company was also offering severance of up to 40 weeks of pay, depending on age and number of years worked.
Employees also would be eligible for health coverage ranging from six months for junior staffers, to two years for senior employees.
Natoli said layoffs, if they have to be made, would be based on seniority and job category, as mandated by union contract, and would be made in November after all employees had a chance to review the buyout package.
In addition to the job cuts, Bennett said The Inquirer will close its one-person Rome bureau, responsible for coverage of southern Europe, northern Africa and the Middle East. That will leave the paper with one bureau in Jerusalem, down from four in the mid-1990s.
The Inquirer also will reconsider how it deploys news personnel throughout the Philadelphia region.
"We need to put everything on the table," Bennett said. "The details I don't know. But the core value of covering our region as a whole will have to stay."
Days, at the Daily News, said he was unsure how coverage would change. Already, the paper has limited much of its coverage to city issues and sports.
According to the Newspaper Guild, The Inquirer's total editorial staff numbered 721 employees in 1989. A decade later, the number had dropped to 632.
Contact staff writer Thomas Ginsberg at 215-854-4177 or tginsberg@phillynews.com.
Here's an unexcerpted version.
OK, what exactly does that mean? The problem may be -- besides being lying leftys -- that you are supposed to be an expert in communication and you say things like that.
Trendlines don't look good for mainstream media:
credibility, subscriptions, jobs down.
Blogs, electronic forums, email, Internet skyrocketing.
And they think they're coming after us -- and the President.
What was their name again?
The only future for print newspapers companies is in their internet sites. Diehard newspaper readers are dying off and new people are not being enticed to replace them.
Young people, usually strapped for cash, already pay monthly for internet services and they can get all the news they want there.
Why would they pay for a print newspaper as well? Save the money for a night out on the town once in a while. I know that's the thinking of the young adults in my family.
The new Bulletin is conservative.
Hopefully Tony Auth was among those who got canned.
They have a death wish and probably will keep him to the end.
Plus, I encourage FReepers to support their good local papers, to keep alternatives viable. Many of them are solidly traditional.
That's right on the money. The discrepancy between the salaries at the top and the bottom of the business is absolutely astonishing.
Many locals can't afford to pay their reporters much at all...in fact, many qualify for food stamps! It's a shame that the good little papers are hurt along with the leftie MSM trash.
I hope the new Bulltetin makes it big.
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